Brief Exercise: 12-3, Three Types Of Activities

Derek Fuchs
Module 7, Homework 7, MGMT210

Brief Exercise 12-3, Three Types of Activities

O, I, F

F Repayment of long-term debt
O Purchase of equipment
O Collection of customer’s account
F Issuance of common stock
I Purchase of another company
F Payment of dividends
O Sale of equipment

Brief Exercise 12-4, Direct versus Indirect Method

Direct, Indirect

I Net income
I Increase in accounts receivable
D Collections on accounts receivable
D Payments on accounts payable
I Decrease in accounts payable
I Depreciation expense
I Gain on early retirement of bonds
D Cash Sales

Brief Exercise 12-5, Direct Method

1. $3,000
2. ($1,000)
3. ($3,000)
4. $2,000

Brief Exercise 12-6, Indirect Method

1. Increase in accounts receivable A
2. Decrease